This essay is an interesting bit of economics, but it's not really talking about OpenSource, even less Free Software, as it only concerns itself with pricing.

It is applicable to all software that is distributable and usable for free, that is proprietary Freeware, as well Free Software. It totally ignores how copyleft affects the economy of software.

I will let more economically-versed people expand on how the right to modify, and redistribute modified versions of the software really removes the artificial scarcity imposed on software by proprietary licensing, and how it underlines the real scarcity: skilled programmers.